Friendly Bank
In recent years, changes in the high street banking sector have been rapid and dramatic. Up until the 1980s, banks operated primarily at their own convenience; opening between 9:30 and 3:30 and often closed for lunch. The local bank manager understood local business needs and had significant discretion in what transactions were approved; their decisions being based as much on intuition, experience and local knowledge as on bank protocols and regulations.
In the 1980s, two significant changes occurred which sent shock waves through the high street banks. First, the development of information technology (IT) changed the role of bank staff by proceduralising many transactions and reducing the numbers of staff needed. Those who were left were expected to take on more of a sales role, selling wider ranges of financial products.
The second change, in part a result of the developments in IT, was the development of phone banking and subsequently on-line banking. Starting with First Direct, phone banking rapidly grew in popularity in the UK market. Call centres, open 24 hours a day, allow people to manage their accounts in a way and at a time that suits them. It is also cost effective for the bank; not having to spend vast sums of money on high street real estate. A call centre can be established on a greenfield site, often with the assistance of government funding. Staff need no prior banking experience, indeed in some cases it is a disadvantage! Instead they need customer service skills and IT skills in order to deal efficiently and effectively with customer queries. This trend has been further exacerbated by the Global Financial Crisis (GFC) of 2007, driving banks to maintain better balance sheets, and to reduce costs further in order to achieve this. It might be argued that jobs in 21st century retail banking are more like shop assistants than traditional banking. The salaries and contracts offered to bank employees often reflect this, with relatively low basic pay, some bonuses available based on team performance and a lot of part time employment.
Friendly Bank
Friendly Bank is the on-line banking arm of Parkers PLC, one of the smaller high street banks. Parkers has, for its century-long existence, prided itself on its reputation for customer service, knowing who the customers were and giving them a sense of security and stability. In Parker’s case, the customers were predominantly white, middle class and wealthy. Its relative smallness had, its Chief Executive Officer (CEO) Hector Brogan felt, given it this distinctiveness – “You know where you are with Parkers” being the current strap line. However, size matters and in the case of Parker’s, the heavy overheads associated with maintaining the high street branch network placed strain on the business. While Hector did not want to cut down on the branch network, this was forced upon him in 2012 when the bank almost went bankrupt and only just fought off a hostile takeover by a major European competitor. Therefore, in 2013 Parkers closed down 60% of its branch network and replaced it with a phone/on-line banking operation, trading on Parkers’ reputation for customer service but with much lower operating costs. It specifically targeted young professional customers with large amounts of disposable income but little spare time. Chris Hackett was headhunted from her Deputy-CEO post at a rival bank to head up the new operation – now named “Friendly Bank”.
Friendly Bank’s headquarters were established on an Industrial Park on the outskirts of Southampton, near Parkers’ existing regional office for the south and west. Investment funds were made available by the local council which offset some initial costs. Given the branch closure programme, Parkers allowed branch staff who were to be made redundant the opportunity to transfer into the customer services operation at the new headquarters. This required quite a lot of training and retraining, although the new jobs required fewer skills than the branch-based work, and accordingly were paid less. Customer service staff are expected both to deal with customer queries and to encourage customers to buy additional services and products that the bank offers, thus generating additional income. This sales component is a key performance indicator – the performance of the customer service teams is evaluated on weekly Sales Against Targets (SAT) figures. Regularly exceeding SAT can generate additional bonuses for the customer service staff, while regularly missing SAT puts people under the threat of disciplinary action.
By the time Friendly’s was launched, with a high profile but restrained media campaign in early 2013, the Southampton HQ employed some 300 customer advisers. Of these, about 60 had previously been employed by Parker’s in some capacity or another. One of these is Sheila Pendeford.
Sheila’s story
Sheila is confused. She had worked at Parkers branch in Fareham for 8 years, three years as a school leaver and latterly for 5 years part time having taken 6 years out to raise two children. Now 32, with two sons aged 10 and 8 she has taken the move to Friendly’s customer service operation rather than be made redundant when the Fareham branch was closed. She thought Friendly’s would give her the chance to get out and make new friends: build herself a career now that both sons were at school. She had really looked forward to the move to Friendly’s.
However, six months after starting at Friendly’s, all is not going as well as she had hoped. Sheila had been made a Team Leader (TL) due to her previous experience in Parkers. She lead a team of 14 – 9 “girls” and 5 “boys” (she always called them that – “makes it seem more like a family” she says). She had struggled a bit with the TL training course she had been sent on to prepare her for the new role. In particular she didn’t really grasp the need to produce weekly Sales Against Targets (SAT) figures: “creates a lot of paperwork for no good reason” it seems to her. She keeps telling Keith, her boss, that as long as the team is busy they must be doing well enough. It’s not as if hitting the target makes that much difference to her salary: she and the team can earn additional quarterly bonuses if they regularly exceed their SAT figures, but Sheila is happy enough with her current pay. The team doesn’t seem too bothered about targets either, except for Carl Evans, her Assistant Team Leader (ATL), who is just a workaholic and not, in Sheila’s opinion, a “team player”. He keeps pressuring the team to exceed SAT and had developed his own smaller team of “Satbusters” (as they called themselves) who really tried hard to exceed their targets and earn the extra income. This felt wrong to Sheila; “banks are about customers” she thought, and people should be able to get on with each other, not compete all the time.
Sheila wants people to like her. She frequently offers to help out other TL’s and customer advisors, although they don’t ask her as often as they might. Sheila suspects she might intimidate them a bit because of her experience at Fareham. If giving others help and advice means that she is occasionally taken away from her immediate team, her girls and boys can manage – if necessary they can always ask Paul. Paul is always willing to help, unlike Carl. Paul is a good “people person” and a “team player” – he talks to others in the office and always knows what is going on. He reminds her of her older son Andy.
The reason for Sheila’s confusion is that she has just had a meeting with Keith Elliot, the Customer Service Manager and the immediate boss of all 8 day-shift TL’s. He offered her some additional training, which she thought was a good sign, until it turned out she was being offered the TL course she had already completed – surely Keith should have realised this! Something to do with a SAT refresher he had said, focusing more on developing an effective team, but she didn’t understand why. Targets weren’t that important and the team seemed to manage pretty much by itself, helped by Paul of course.
Paul’s Story
Paul Harrington is a recent addition to Sheila’s team, a replacement for Jennie, one of the “Satbusters” who had become so fed up with Sheila’s lack of drive that she had asked for a transfer. Other team members had simply lost patience with Sheila’s patronising attitude and with management’s unwillingness to do anything about it – Sheila’s team has the highest level of turnover and the lowest level of bonus payments of the 8 day-shift teams. Paul was a Business graduate from Southampton University. He had started out working for Friendly’s to pay for his course and had taken the job permanently on graduation. He hopes to be accepted onto Parker’s fast track management development programme soon. He had not wanted to be part of Sheila’s team and suspects he was put in Sheila’s team as a punishment for criticising Keith Elliot while still a student. Paul had seen how Sheila operated at first hand and he thought she was incompetent. He also suspects she fancies him (but then Paul thinks everyone fancies him). However, everyone thought Sheila was incompetent. Most of the office had at some time been on the receiving end of Sheila’s “help” which invariably made things worse, so now they try to ignore her. Paul believes his best bet is to put up with her for now. When she is finally shown to be incompetent, he will step in as the natural replacement and from there it is only one small step to being a fast tracker. Carl would never be TL, he never looked beyond working the phones, never saw the big opportunities within Financial Services.
Paul knows he holds Sheila’s team together, and, more importantly, Keith knows this as well. It was Paul who had pointed out to Keith that not only was Sheila’s team not making its SATs (as Keith knew all too well), but that in fact it was Sheila who was directly responsible for the failure. She did not encourage the team, she was frequently away from their area of the open plan office in which all the customer advisers worked and she seemed entirely uninterested in targets. That, he thought, would change when he was put in charge.
Carl’s story
Carl Evans, Sheila’s ATL, is starting to feel disillusioned at Friendly’s. OK, so Sheila could be a bit of a pain at times but her heart is in the right place and he wouldn’t want her job for the world. Carl thinks Paul is a schemer, a gossip, not to be trusted and not all that bright. Carl does however have a problem with Sheila’s attitudes to the SATs. The average customer adviser earned a basic salary of about £16,000 a year, but this could rise by up to £1500 if the team as a whole exceeded their SATs. TLs made a basic of £19,000 plus a small commission on the sales made by their team members. Carl earns an additional £1,000 on his basic customer adviser salary as an ATL. Carl suspects that Sheila is not that bothered about cash. Carl however is about to marry Fiona and needs as much as he can earn to furnish the house he and Fiona are in the process of buying (with a cheap mortgage from Friendly’s of course).
Carl can see that some people would find the customer adviser job pretty dull. Most of the calls are routine and don’t require any real thinking about – “take the details, enter them into the computer, it makes a decision or processes the transaction and on to the next call”. Carl however likes talking to people and takes a genuine interest in their situation. He gets a real buzz out of identifying a genuine sales opportunity, not just selling a product for the sake of it but actually selling something the customer needs. He feels that if only Sheila and Paul would sort themselves out, he would really enjoy his job. He misses his Satbuster friends – they had all joined at the same time and had been the top team for a while. But then Sheila had come and when Jennie finally lost patience, Paul’s arrival had driven most of them out with his comments and “sucking up” to any manager he could find. Given Sheila’s indifference to the SATs, Carl knows there is no real point working too hard because her team never get bonuses. Carl however continues to try his hardest, often covering for both Sheila while she is off gossiping with some of the other “long stays”, and Paul who is always looking for mischief. “If Paul put as much energy into his work as he does into stirring up trouble” Carl thought, “this team would make more money than the whole of the rest of the office combined”.
Keith’s story
Keith is starting to avoid Sheila’s team. He has enough on his plate as it is. To start with, the customer advisers as a whole are not very happy. Early in Friendly’s existence, they had effectively split into two groups, locally known as the Long Stays and the Short Stays. The Long Stays were the staff who, like Sheila, had transferred to Friendly’s from Parkers. The Short Stays were the new recruits like Paul and Carl. Long Stays tend to be a little older than Short Stays who are mainly recent graduates or school leavers. Long Stays also have a habit of going on about “what it was like at Parkers” which they refer to as the “proper bank”. “What does that make Friendly’s for goodness sake” Keith thought, “an improper bank?” Keith also suspects they don’t really understand that Friendly’s is a business, designed to make money with relatively low overheads. That was why the bonus system was in place – to encourage people to work harder and to develop a little healthy competition between the teams. Long Stays just don’t seem to realise this. They also seem to spend more time talking to each other than working in their teams.
If the Long Stays were a worry, the Short Stays were hardly any better. They had started out keen and enthusiastic, as only people new to making money can be. However you had to be very accurate with the work – one slip could cost the bank a lot of money, and recent scandals with Payment Protection Insurance had made the industry very wary about mis-selling inappropriate products. Unfortunately, Keith felt, young people could be either friendly and chatty or careful and precise, but not both at once. If they chat they make mistakes, if they don’t chat they don’t make sales. A worrying number of customer complaints were coming in about errors in accounts, and sales (and therefore profits) had not been great either. Keith was all too aware that Chris Hackett knew about this. Chris was Keith’s immediate boss and only one step away from Hector himself! She was not known for her tolerance and understanding – she was referred to around the banking world as Chris Hatchet. (Keith suspected she knew about this and was secretly pleased.)
Despite the promises that Friendly’s would be a great place to work, the customer advisers knew that the work was not particularly stimulating. To compensate, they had started playing games. Some of these Keith could positively endorse – competing with each other to make more sales or trying to redesign the systems to make them more efficient. Some games Keith could tolerate – trying to get through the most customers in the quickest time or playing tricks on each other. Other games however were causing him problems – picking on Sheila for example. Staff turnover was becoming a problem and Keith knew that Chris was concerned about this too.
Paul and Sheila were perhaps the best examples of the worst the two groups in the office had to offer: Sheila was behaving like her job was either a public service or a hobby, or both. Paul was a backstabbing and arrogant, ambitious only up to the point at which he had to do something. If Keith had his way he would sack both of them and put Carl in charge.
Things had recently come to a head with Paul complaining about Sheila behind her back. Keith had to agree with Paul’s complaint, but she hadn’t actually done anything wrong. Rather than confront her and risk a scene which stood a good chance of alienating all the Long Stays, he thought instead he would suggest she retrain for her job. He hoped she would take this as an insult and would resign, thus avoiding him actually having to do anything. However, the meeting had not gone according to plan. Sheila just didn’t seem to understand that she was not wanted, either by him, her team, or as he saw it, most of the rest of the office. Even the Long Stays were getting fed up with her constant interfering.
Hector Brogan has recognised that all is not well at Friendly’s. He wants an “inside view” on what it is like on a day to day basis to work in the bank and has asked you to “shadow” Keith Elliot as he goes about his job. In the course of the week, you have observed most of the events outlined above and as a result have identified a number of problem areas which you think Hector should address. These include:
1. that the different groups in Friendly bank are not working well together and in the overall interests of the bank (i.e. an organisational design/organisational culture problem)
2. that the teams are not working as teams (i.e. a teamworking problem)
3. that different members of staff seem to want quite different things out of their jobs (i.e. a motivation/individual differences problem)
4. As a result of the above, relations between individuals and groups are becoming increasingly tense, leading to informal power games, absenteeism and poor performance (i.e. a stress / power problem)
5. That team leaders and their supervisors are not taking appropriate action to rectify some of the problems which are apparent in the bank (i.e. a leadership/decision making problem)
Hector has asked you to produce a paper for him explaining in more detail what you mean by these points.
Task
Write an essay of 1500 words maximum addressing the problems at Friendly Bank, drawing on TWO of the topics covered on the module. You must use appropriate theory to explain your analysis, and give clear examples from the case study to illustrate your observations. You should also make suggestions (based on theory and observation) about what could be done to resolve the problems you have decided to address.
Criteria
1 Introduction – do you identify clearly the issues to be discussed and the structure and content of the essay.
2 Structure, layout and organisation of material – is the structure logical, is the work clearly laid out and well organised?
3 Content and analysis – do you discuss the problems at Friendly’s using appropriate theory? Do you show evidence of wider reading around the theoretical issues?
4 Conclusions and recommendations – Are your conclusions clear, and are any recommendations realistic?
5 Do you draw the whole piece of work together in summary at the end?
6 Referencing – do you make correct use of quotations and references? Do you present references accurately in a reference list at the end of your essay?
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